On March 10, 2026, New Jersey Governor Mikie Sherrill proposed a budget for the fiscal year of 2027. The budget’s main attributes are its spending cuts, elimination of certain tax exemptions, and an increase in certain programs deemed by some as being “underfunded.”
The current administration predicted that New Jersey would face a deficit of around $3 billion by current spending and taxation levels, causing Sherrill to ask departments to identify places where spending could be cut. This resulted in a budget with almost $2 billion in spending cuts, while also closing corporate tax loopholes which should bring in another $700 million. One of the biggest reasons closing the deficit is so important is because of how quickly it would eat through the current $7.5 billion surplus the state currently has if nothing was done about it, with administrative projections giving it around two years without swift action. Additionally, the state’s borrowing costs would increase if it continued to run steep deficits, which would further affect New Jersey taxpayers, as they would be the ones to foot the bill if something like that happened.
One of the first and most profound spending cuts was from the Stay NJ property relief program. The income cap of receiving benefits would be halved from $500,000 to $250,000, and the maximum benefit would shrink from $6,500 to $4,000. This is meant to shield the middle class from the brunt of the cuts, which makes sense given the more progressive fiscal policy of New Jersey. Other policies meant to improve efficiency of government bureaucracy are also being undertaken.
The new budget also aims to improve the lives of New Jersey youth, with $12.4 billion for K-12 schools, $370 million more than last year. Sherill also wants to work with the legislature to continue to work on the current school funding formula. The budget also includes $125,000 for the new Office of Youth Online Mental Health Safety and Awareness in the Department of Health, which would guide the responsible usage of social media platforms among youth. $7.2 billion is also allocated to New Jersey’s Medicaid program, NJ FamilyCare, which helps New Jerseyans with benefits which extend to over half of the state’s children.
The budget also increases funding for the New Jersey Innovation Authority to help make it easier for small businesses to obtain licenses, and increases funding for NJ Transit by 26%, while also including $1.3 billion for investing in roadway and bridge projects. These transportation investments are meant to improve the existing public transportation systems in the state, while also reducing transportation costs for families which may rely on easy transit throughout the state.
This budget proposal will be debated and negotiated by the New Jersey legislature, and by June 30th a new budget must be passed by a majority vote in both the New Jersey state senate and assembly, as that would be the beginning of the new fiscal year.
